Decrease in Q1 Operating Company Patent Litigation Comes with a Canine Caveat
May 19, 2021
Operating companies added 19% fewer defendants to patent litigation campaigns in the first quarter of 2021 than they did in the same period one year ago, adding 256 defendants (compared to 316 defendants a year ago.). Additionally, operating company filings trailed the Q1 average for 2018-2020 by 27.7% and were 30.2% lower than the previous quarter.
| Defendants Added | Change Compared to: | ||||
| Q1 2021 | Q1 2020 | Q1 2018-2020 Average | Q4 2020 | ||
| Operating Company | 256 | -19.0% | -27.7% | -30.2% | |
| NPE | 594 | 20.0% | 38.0% | 9.0% | |
| Total | 850 | 4.8% | 8.4% | -6.8% | |
These numbers come with a significant caveat, however, as they exclude litigation filed by a small group of design and utility patent owners targeting copycats and counterfeiters selling products online. RPX now classifies these cases separately, as the dynamics of anti-counterfeit cases are quite different from other operating company patent suits, in that they primarily seek injunctive relief and often end in default judgments. Moreover, these suits often name hundreds of defendant entities, many of which may be online storefronts for the same ultimate parent.
While such litigation was once rare, RPX observed a spike in design patent and e-seller litigation in Q3 and Q4 2020, with dozens of defendants targeted in just a handful of lawsuits. Factoring out these massive, multi-defendant cases (whether based on design or utility patents), litigation brought by operating companies continues on a flat to slightly downward long-term trend, as detailed by RPX here.
Including all defendants, operating company litigation in Q1 saw just over 700 defendants added to patent campaigns, as shown in the chart below.
Among the plaintiffs making up that difference was Doggie Dental, a maker of teeth-cleaning chew toys for dogs, which targeted 289 e-seller defendants during the first quarter: all of the defendants sued by the company appear to be online retailers, each sued for infringement of a single utility patent in a single suit. Regular readers may recall that Doggie Dental added 137 defendants in Q4 2019 as well.
The Doggie Dental case follows another “canine hygiene” patent suit brought in Q4 2020 by AquaPaw, which sued around 125 e-seller defendants in Q4 over the provision of products designed to keep pets distracted while bathing. (PACER data did not reflect those defendants when RPX’s last quarterly report was published, so the Q4 2020 numbers are now higher than previously reported.)
